Last Mile Delivery Market

Growing Popularity of e-Commerce Platforms Improving Delivery Services Drives Market Growth.

The increasing popularity of e-commerce platforms enhancing delivery services is the main driver of the global market's CAGR for Last-Mile Delivery. People were intrigued about how online shopping portals worked. Therefore, they grew exponentially during the last few years. Later, when consumers were accustomed to the online shopping model through numerous online portals and e-commerce platforms, they needed to be more confident in the delivery of their purchased things. Previously, the delivery period for an internet-ordered product was projected to be at least 7-8 working days.

However, as time passed, e-commerce platforms improved the online buying paradigm, bringing anticipated delivery times closer to same-day delivery in some circumstances. Nowadays, the optimal delivery time for a random product purchased on an e-commerce platform is 3-4 working days, which has boosted the number of online shoppers to an all-time high. This resulted in a high demand for speedy delivery services, as delivery time has an impact on client retention on an online selling platform.

This is where the last-mile delivery market comes into play since the logistics and shipping departments are critical to the growth of such e-commerce platforms.

Last-mile delivery services are vital for attracting and retaining customers, thereby increasing a company's earnings. Businesses may stand out in the competitive market and meet the growing need for rapid and convenient delivery services by offering same-day or next-day delivery options. In addition to meeting consumer expectations, this better customer experience encourages brand loyalty and trust, resulting in repeat business and long-term relationships with the organization. Effective last-mile delivery services, with same-day or next-day options available, can be strategically used by organizations to improve customer satisfaction and increase sales and revenue.

Businesses can acquire a competitive advantage, promote client loyalty, and eventually achieve long-term success by focusing on providing exceptional delivery experiences.

The main trend driving market expansion is a strong focus on providing services to specific end-user categories. As a response to the healthcare industry's expanding issues, logistics service providers have begun to implement innovative logistics supply models for the medical and pharmaceutical sectors. These include rising medical device costs as a result of increased demand from the elderly and active populations. For instance, DHL's supply chain arm has created innovative logistics solutions for the medical industry, which combine field inventory, important medical devices, and quality management systems in a single location to improve traceability and control.

In addition, this model actively lowers the need to maintain and operate a large number of medical devices. All vital gadgets are delivered on the final mile and on a same-day basis. Major medical device manufacturers in North America are already using this supply chain approach, and it is projected to fuel market expansion throughout the projection period. Thus, driving the Last Mile Delivery Market revenue.

The rapid expansion of the e-commerce sector is a primary driver of the Global Last Mile Delivery Market Industry. As consumers increasingly prefer online shopping, the demand for efficient delivery services has surged. In 2024, the market is valued at 197.3 USD Billion, reflecting the growing reliance on digital platforms for purchasing goods. This trend is expected to continue, with projections indicating that by 2035, the market could reach 885.4 USD Billion. The convenience of home delivery and the expectation of fast shipping times compel companies to enhance their last mile delivery capabilities, thereby shaping the industry's landscape.

Urbanization is a significant factor influencing the Global Last Mile Delivery Market Industry. As more people migrate to urban areas, the demand for efficient delivery services increases. Urban centers often present unique logistical challenges, such as traffic congestion and limited access to certain locations. This necessitates innovative solutions to ensure timely deliveries. The growing population in cities is expected to drive the market's expansion, as businesses seek to meet the rising expectations of urban consumers for fast and reliable delivery options. Consequently, urbanization is likely to remain a key driver of growth in the last mile delivery sector.

Changing consumer expectations are reshaping the Global Last Mile Delivery Market Industry. Today's consumers demand faster delivery times, often expecting same-day or next-day service. This shift in expectations compels businesses to adapt their logistics strategies to remain competitive. Companies are investing in technology and infrastructure to meet these demands, which is reflected in the projected CAGR of 14.62% for the period from 2025 to 2035. As consumers continue to prioritize convenience and speed, businesses must innovate and enhance their last mile delivery services to satisfy these evolving preferences.

The Global Last Mile Delivery Market Industry is poised for substantial growth, with projections indicating a market value of 885.4 USD Billion by 2035. This anticipated growth reflects the increasing demand for efficient delivery solutions across various sectors. The market is expected to experience a robust CAGR of 14.62% from 2025 to 2035, driven by factors such as e-commerce expansion, technological advancements, and changing consumer preferences. The upward trajectory of the market underscores the importance of last mile delivery in the broader logistics landscape, highlighting its critical role in meeting the needs of a dynamic consumer base.

Sustainability is becoming increasingly important in the Global Last Mile Delivery Market Industry. As environmental concerns grow, consumers and businesses alike are seeking greener delivery options. Companies are exploring electric vehicles, eco-friendly packaging, and optimized delivery routes to reduce their carbon footprint. This shift towards sustainability not only meets consumer demand but also aligns with regulatory pressures for environmentally responsible practices. As the industry adapts to these changes, the focus on sustainable delivery solutions is likely to drive innovation and growth, further shaping the future of last mile delivery.

Technological innovations play a crucial role in transforming the Global Last Mile Delivery Market Industry. The integration of advanced technologies such as artificial intelligence, machine learning, and route optimization software enhances operational efficiency and reduces delivery times. For instance, companies are increasingly utilizing drones and autonomous vehicles to streamline the delivery process. These advancements not only improve customer satisfaction but also contribute to cost reductions. As the industry evolves, the adoption of such technologies is likely to become more prevalent, further driving growth and efficiency in the last mile delivery segment.

By region, the study provides the market insights into North America, Europe, Asia-Pacific and the Rest of the World. North America dominated the last-mile delivery industry in 2023. North America has a well-developed transportation infrastructure that includes road networks, highways, airports, and distribution facilities, allowing for efficient last-mile delivery operations. The existence of modern logistics facilities and fulfillment centers allows logistics companies to expedite delivery procedures while meeting client expectations for timely and cost-effective deliveries. The fast expansion of e-commerce and online shopping has increased demand for last mile delivery services in North America.

With the growing popularity of online shopping platforms like Amazon, Walmart, and Target, consumers anticipate quick and efficient delivery of their purchases, necessitating the need for dependable last-mile logistics solutions.

Further, the major countries studied in the market report are the US, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, and South Korea.

Figure 2: LAST MILE DELIVERY MARKET SHARE BY REGION 2023 (USD Billion)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe Last Mile Delivery Market accounts for the second-largest market share. The region's e-commerce activities are expanding rapidly, owing to a growing middle-class population, increased smartphone penetration, and improved internet connectivity, increasing online shopping and demand for efficient deliveries.  Further, the German Last Mile Delivery Market held the largest market share, and the UK Last Mile Delivery Market was the fastest-growing market in the European region.

The Asia-Pacific Last Mile Delivery Market is expected to grow at the fastest CAGR from 2024 to 2032. This is due to the increasing demand for customized workflow, automation, and the simplification of complicated operational processes, all of which have had a significant impact on how businesses operate. Moreover, China’s Last Mile Delivery Market held the largest market share, and the Indian Last Mile Delivery Market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Last Mile Delivery Market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the Last Mile Delivery industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the Global Last Mile Delivery industry to benefit clients and increase the market sector. In recent years, the Last Mile Delivery industry has offered some of the most significant advantages to medicine. Major players in the Last Mile Delivery Market, including Accenture Plc, CMA CGM SA Group, Deutsche Post AG, DSV AS, FarEye Technologies Inc., FedEx Corp., FM LOGISTIC CORP, and others, are attempting to increase market demand by investing in research and development operations.

DHL is a German logistics firm that offers courier, package delivery, and rapid mail services, delivering over 1.7 billion parcels annually. DHL Express, a part of the German logistics corporation DHL Group, is one of Europe's leading parcel services providers and Germany's primary courier and parcel delivery service. In April 2021, DHL Express teamed up with Fiat Professional to further electrify last-mile delivery. This is another step towards DHL Express's aim of electrifying 60% of its fleet by 2030.

FedEx Express is a large American freight airline headquartered in Memphis, Tennessee, USA. As of 2023, it is the world's largest cargo airline by fleet size and freight tonnes carried. It is the namesake and major company of FedEx Corporation, delivering goods and packages to over 375 locations in 220 countries across six continents every day. FedEx Express is the world's largest express transportation provider. In March 2019, FedEx paid $129.8 million for P2P Mailing Limited, a provider of global e-commerce shipping solutions, thereby considerably expanding its last-mile network.